Summary: In the midst of restructuring, the New York Times (NYT) has entered the rumor mill as speculation the company would be sold swirled throughout Wall Street yesterday. Shares closed up nearly a dollar, or 4.19%, in composite trading yesterday. The takeover rumors have increased the price for the company's credit default swaps, which jumped by 10 basis points yesterday to about 62.5 basis points, or $62,500 to insure $10 million in debt. Pete Najarian, co-founder of Web information site insideoptions.com, noticed increased options activity surrounding Times' stock yesterday as investors hope to profit from NYT shares should they succeed in climbing above $25 before the end of November (or should they fail). "The activity in the options market certainly grabbed attention," Najarian said. Shares closed at $23.86 yesterday, then gained an additional $0.09 in after hours trading. Yesterday, according to market research firm Track Data, a total of more than 8,500 calls and 2,957 puts changed hands in NYT shares - considerably more than the average volume of 242 contracts.
Related links: • The New York Times Company Q2 2006 Earnings Conference Call Transcript • Why Google Didn't Buy the New York Times • Real Value Remains In New York Times, But Is the Will There? • Cramer's Take on NYT • Chart: Diversified Media Stocks - Annual Earnings Growth • Options, Credit Markets Move on N.Y. Times LBO Speculation
Potentially impacted stocks and ETFs: New York Times (NYT), Gannett (GCI), Knight-Ridder (KRI), The McClatchy Company (MNI), Tribune Company (TRB), Washington Post (WPO)
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